The move will see the Scandinavian dairy giant increase production capacity for skyr and cottage cheese at two key facilities.
The joint Danish-Swedish venture is set to invest €35 million in its Upahl site in Germany to drive skyr production, and €28.3 million in its Falkenberg facility in Sweden to expand cottage cheese production.
Arla said the investment has been prompted by rising demand for high-protein dairy products, with skyr volumes growing by more than 33% across the firm’s European markets and cottage cheese volumes increasing by 25% across its markets over the same period.
According to the company, cottage cheese has experienced significant market growth across Europe over the past year as consumers increasingly focus on health and wellness.
Cottage cheese sales grew by 13% in Sweden, 37% in Denmark and the UK, and 38% in the Netherlands.
Arla recently consolidated its global cottage cheese capabilities through the acquisition of leading Australian producer Brancourts.
The company’s Upahl investment will also improve the factory’s efficiency and is expected to be completed in the second half of 2028. Meanwhile, the Falkenberg investment will include site modernisation works, with improvements being introduced gradually throughout 2028.
“Consumer preferences continue to evolve, and we see growing demand for products with high protein combined with convenience and great taste,” said Arla chief executive officer Peder Tuborgh.
“Dairy products such as skyr and cottage cheese continue to resonate with consumers across many markets, and these investments reflect our ambition to make these products available to more people.”
He added: “These investments ensure that we can continue meeting growing consumer demand, supporting our customers and creating long-term value from our farmer owners’ milk.
“The growth we are seeing in skyr and cottage cheese gives us confidence in the long-term potential of these categories.”
